2nd report to the CDMM on recent developmentsin the field of copyright and neighbouring rightsat the European and international level

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Secretariat memorandumprepared by theDirectorate General of Human Rights

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1. INTRODUCTION

1. This document contains a summary of main developments in the field of copyright and neighbouring rights at the European and international level, prepared for the Steering Committee on the Mass Media (CDMM) by the AP-IP.

2. RECENT DEVELOPMENTS AND PROBLEMS

2. Since the first AP-IP Report was drawn up in 2001 (cf. document AP-IP (2001) 3), the following developments and problem areas in the field of copyright and neighbouring rights can be highlighted:

2.1. Enforcement of copyright and neighbouring rights in Europe and the level of piracy

3. Intellectual property laws in Europe are not always having the desired effect. In particular, there is a lack of uniformity in the systems of sanctions. In order to provide a remedy to this situation in the EU, the European Commission has recently proposed a Directive on the enforcement of intellectual property rights (cf. paragraphs 17 to 19). It should be born in mind that this Directive as well as existing Directives will be binding upon not only the present EU states but also those which will become members in 2004 (Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic and Slovenia).

2.2. Remuneration for private copying, in particular in the digital area

4. The main question is to what extent, if any, should digital private copying be exempt from exclusive rights. The second question is, if digital copying is exempt, to what extent and how should right owners be remunerated for it. A further issue is to what extent existing or available Technological Protection Measures (TPMs) should be taken into account when fixing remuneration. The EU Directive 2001/29/EC on copyright in the information society leaves the matter largely up to the Member States’ discretion.

2.3 The relationship between technical measures and access to protected works

5. It has by now become generally accepted that, in the digital environment, TPMs are a useful, if not necessary means in order to protect copyrighted works against unauthorised access and use. Moreover, TPMs are a necessary component to implement working Digital Rights Management (DRM) systems. DRM systems not only enable individual transactions with regard to copyrighted subject matter in the digital field, but likewise enable a product differentiation which, by way of corresponding strategies of price discrimination, is generally said to enhance the overall public benefit. If this is accepted, then it is obvious that TPMs are themselves in need of strong legal protection against unauthorised circumvention.

6. However, there is a debate on whether the legal protection against unauthorised circumvention contradicts other public policy considerations such as freedom of expression and information. In particular, privately applied TPMs may prevent people from benefiting from copyright exceptions.

7. In the European Union, this conflict has been addressed by Article 6 of Directive 2001/29/EC, which provides that member States should take action in order to allow the users to benefit from copyright exceptions where TPMs prevent them from doing so. However, in the case of copyrighted material which is made available to the public on-line on contractually agreed terms, TPMs and the legal protection granted to it override all exceptions and limitations. This is even true in the case of exceptions or limitations which protect particularly high-valued interests and rights, such as freedom of news reporting, public discussion by way of citation and the like.

- beyond private copying, to what extent should other traditional exceptions to copyright apply in the digital environment;

- the questions of how to ensure that authors and other right holders can obtain proper remuneration for the exploitation of their material;

- applicable law and jurisdiction in relation to Internet activities.

10. Within the EU, the issue of liability of intermediaries has by now been settled to a considerable degree on the legislative levelas a result of the implementation of Directive 2000/31/EC on electronic commerceinto the national legislations of the EU member-States. However, the legal status of search engines and hyperlinks has not yet been addressed at the European level. Moreover, EC Directive 2001/29/EC does not entirely resolve the situation on copyright exceptions within the EU since it does not fully harmonise these, but rather sets limits on exceptions which member States remain free to adopt or not within various categories. As far as applicable law and jurisdiction are concerned, mention should be made of the Hague Conference on private international law, the work within the EU on non-contractual obligations (Rome II) and work undertaken by WIPO.

3. EUROPEAN UNION DEVELOPMENTS

3.1 Directive 2001/29/EC on copyright and related rights in the information society

12. This Directive, which was described in the first report of AP-IP to CDMM, is still in the process of being implemented by EU states. Although the date set for implementation was 22 December 2002, only two states (Denmark and Greece) had implemented by that time. Since then, a further four states (Austria, Germany, Italy and UK) have implemented it, but at the time of writing this report (October 2003), the process had yet to be completed in the other EU states.

3.2 European Commission report on Directive 93/83/EEC concerning copyright and related rights in relation to satellite broadcasting and cable retransmission

13. The Commission has submitted a report [COM (2002) 430] on the operation of Directive 93/83/EEC, which harmonises certain aspects of copyright laws in the EU (and wider EEA) in order to facilitate cross-border transmission of programme material by satellite broadcasting and by cable retransmission. The report indicates that the Commission is generally satisfied that the Directive has been correctly implemented, but sets out a number of difficulties regarding the way in which the Directive is operating in practice.

Satellite broadcasting

14. The Directive provides that, for copyright purposes, the act of satellite broadcasting is to be treated as taking place in the (EEA) country where the broadcast originates. A key reason for this is to provide the possibility that authorisations from right owners to broadcast protected material may be obtained by satellite broadcasters only in the country of origin of the broadcast, and for the entire ‘footprint’ of the broadcast. The report expresses concern that, despite this possibility being offered by the Directive, the position in practice is often that broadcasts are not made available outside the country in which they originate, particularly when in an encrypted form. The Commission sees this as contradictory to the principle of Directive 93/831, and the concept of a European audiovisual area in the ‘Television Without Frontiers’ Directive, and indicates that it wishes to see movement towards an EEA-wide approach to satellite broadcasting. It thus intends to work on possible ways of meeting this objective.

Cable retransmission

15. Directive 93/83 requires holders of rights in the content of broadcasts (other than broadcasters) to exercise rights to authorise cross-border cable retransmission of broadcasts on a collective basis, to assist cable operators in obtaining authorisations and thus facilitate such retransmission. The report considers the maintenance of this principle essential, but sees deficiencies in other provisions of the Directive concerned with the negotiation of terms for cable retransmission and dispute mediation. Several possible improvements to these aspects are discussed, but no recommendations are made, since the Commission considers it desirable to assess the rights management and mediation provisions of the Directive in the wider context of new cross-border audiovisual services (such as digital TV and the Internet), before deciding whether to revise these aspects of the Directive or extend them to other services.

3.3 European Commission report on provisions in EC law concerning the authorship of cinematographic or audiovisual works (films)

16. A further Commission report [COM (2002) 691] concerns the operation of provisions in EC law which require the principal director to be treated as an author of a film, but leave EU states free to determine who else (if anyone) is to be so treated in national law. The report shows that 3 EU states treat the film producer as an author along with the director. In other EU states, only the director and other natural persons (e.g. authors of works used in a film) are treated as authors, but there are statutory provisions acting to transfer their rights to the producer in order that the latter can exploit the film. The Commission concludes that the differences which remain in the EU on authorship and ownership or control of rights in films do not seem to create difficulties, particularly as these differences tend to be levelled out in practice by contractual agreements reached between authors and producers on exploitation. However, the Commission feels that varying approaches in EU states on the regulation of such contracts could cause difficulties, and therefore intends to study this and related aspects.

3.4 Proposed Directive on the enforcement of intellectual property rights

17. In January this year, the Commission submitted a proposal for a Directive on the enforcement of intellectual property rights [COM (2003) 46], which follows an earlier Communication on counterfeiting and piracy (as referred to in the first report of AP-IP). The proposal, which is still at a relatively early stage of discussion within the EU institutions, covers not only copyright but also patents, trade marks and designs, and aims both to harmonise national enforcement provisions and to establish a framework for the exchange of information between national enforcement authorities.

18. The draft Directive focuses on infringements of rights carried out for commercial purposes or which otherwise cause significant harm to right holders. Among measures which EU states would be required to provide are: evidence gathering powers for judicial authorities (such as ordering seizure of infringing goods); injunctions to prevent or stop infringements; precautionary measures (such as seizure of financial or other assets of alleged infringers); and powers to order infringers to pay damages or compensation. EU states would also be required to provide criminal penalties (including imprisonment) for serious infringements.

19. The Commission’s proposals go beyond the provisions of the 1994 WTO TRIPS Agreement on enforcement. In this respect the proposals would, in particular, require EU states to enable trade associations and collecting societies to initiate legal proceedings (in addition to individual right holders); to give judicial authorities powers to order disclosure of information (such as the identity of persons involved in dealing in infringing goods), and to order withdrawal of such goods from the market at the expense of the infringer; and to publish court judgements in infringement cases.

3.5 Other matters

20. The Commission has submitted a report [COM (2002) 502] on the operation of those aspects of Directive 92/100/EEC relating to non-profit lending of copyright material to the public. A Communication on the management of copyright and related rights is also expected from the Commission, which is likely to address both individual and collective management of rights, as well as digital rights management systems, and to assess what action, if any, is needed at EU level on rights management.

4. DEVELOPMENTS WITHIN WIPO

28. The protection of broadcasting organisations will be the main point on the agenda of the tenth session of the Standing Committee on Copyright and Related Rights which meets on 3-5 November 2003. Delegations have been invited to consider all elements of a possible new instrument on the protection of broadcasting organisations, as well as the possibility of organising a diplomatic conference.

5. OTHER INTERNATIONAL FORA

29. The General Conference of UNESCO adopted at its 32nd session, which took place in Paris in October 2003, a Recommendation on the promotion and use of multilingualism and universal access to cyberspace. The Recommendation contains provisions on the promotion of multilingual content on the Internet, access to networks and services, the development of public domain content and the balance between the rights of rights holders and the public interests.

30. Up to now, the current Doha-round of discussions under WTO has not focused on copyright and neighbouring rights.

31. Copyright in the information society is also under discussion in the context of the World Summit on the Information Society, the first part of which is due to take place from 10-12 December 2003 in Geneva.

1 However, Directive 93/83 would not seem actually to oblige rights holders to license satellite broadcasting on an EEA-wide basis, or to require broadcasters to provide EEA-wide access to encrypted broadcasts.